A polite way of telling to someone that you know they're (at least in your opinion) are talking bullshit and they should stop now.
The phrase is constructed from the popular modern card game "bullshit" in which when those that lie about the cards they put down and are caught are forced to pick up the cards in the pile. devo

Guy 1: "So then I was just in this Bottle-o and this chick asked me for a root and I was like 'yiew'"
Guy 2: "Pick up the cards gimp"

Player 1 "Three 2's"
Player 2 "Two fours"
Player 3 "Five fives"
Player 1 "your a retard, pick up the cards"